LSM industry grows over 5%
Jul-Mar FY17 expansion is higher than 4.6% in same period of previous year
PHOTO: REUTERS
KARACHI:
The large-scale manufacturing (LSM) industry, which constitutes 80% of Pakistan’s manufacturing base, grew 5.1% in the first nine months (July-March) of the ongoing fiscal year 2016-17, compared to expansion of 4.6% in the corresponding period of previous year.
According to the Pakistan Economic Survey 2016-17, the LSM sectors that showed the highest growth were iron and steel, electronics, automobiles, food and beverages, tobacco and pharmaceuticals.
Incentives likely to support LSM growth: SBP
Meanwhile, the largest decline was seen in fertiliser, wood, rubber, engineering, chemical and leather industries.
Iron and steel - a sector that has 5.4% share in the LSM industry - recorded a growth of 16.58% during July-March of the current fiscal year compared to a negative growth of 7.48% in the same period of previous year.
The growth mainly came from billets/ingots (24.86%) and hot and cold-rolled sheets/strips/coils (9.83%).
Analysts say the growth in iron and steel production was directly related to the increase in demand because of China-Pakistan Economic Corridor-related projects.
On the other hand, electronics - a sector that has 2% share in LSM - grew 15.24% compared to a negative growth of 5.69% in the same period of previous year.
The automobile sector, which has 4.6% share in LSM, showed a healthy growth of 11.3%, but still it was significantly lower than the extraordinary growth of 23.5% last year.
Food and beverages alongside tobacco - the sectors that have 12.4% share in LSM - posted an extraordinary growth of 9.65% compared to just 3.77% last year.
On the negative side, the textile industry, which has the highest share in LSM (21%), continued to show a dismal performance as it recorded a minuscule growth of 0.78% in the first nine months of the ongoing fiscal year, compared to 0.66% in the same period of previous year.
Pakistan is now a $300-billion economy
Pakistan’s textile exports have been stagnant for the last couple of years, mainly due to electricity shortages and poor security situation in the country. This is exacerbated by slow economic activities in Pakistan’s key export markets, especially in Europe.
Ray of hope
There was a significant year-on-year growth in February and March 2017 in the LSM industry. The growth in February and March was 9.16% and 10.46% respectively, which is the highest monthly increase in both 2016 and 2017.
The government expects the LSM growth to continue in coming months due to the Rs180-billion package announced earlier this year to boost the country’s exports.
Published in The Express Tribune, May 26th, 2017.
The large-scale manufacturing (LSM) industry, which constitutes 80% of Pakistan’s manufacturing base, grew 5.1% in the first nine months (July-March) of the ongoing fiscal year 2016-17, compared to expansion of 4.6% in the corresponding period of previous year.
According to the Pakistan Economic Survey 2016-17, the LSM sectors that showed the highest growth were iron and steel, electronics, automobiles, food and beverages, tobacco and pharmaceuticals.
Incentives likely to support LSM growth: SBP
Meanwhile, the largest decline was seen in fertiliser, wood, rubber, engineering, chemical and leather industries.
Iron and steel - a sector that has 5.4% share in the LSM industry - recorded a growth of 16.58% during July-March of the current fiscal year compared to a negative growth of 7.48% in the same period of previous year.
The growth mainly came from billets/ingots (24.86%) and hot and cold-rolled sheets/strips/coils (9.83%).
Analysts say the growth in iron and steel production was directly related to the increase in demand because of China-Pakistan Economic Corridor-related projects.
On the other hand, electronics - a sector that has 2% share in LSM - grew 15.24% compared to a negative growth of 5.69% in the same period of previous year.
The automobile sector, which has 4.6% share in LSM, showed a healthy growth of 11.3%, but still it was significantly lower than the extraordinary growth of 23.5% last year.
Food and beverages alongside tobacco - the sectors that have 12.4% share in LSM - posted an extraordinary growth of 9.65% compared to just 3.77% last year.
On the negative side, the textile industry, which has the highest share in LSM (21%), continued to show a dismal performance as it recorded a minuscule growth of 0.78% in the first nine months of the ongoing fiscal year, compared to 0.66% in the same period of previous year.
Pakistan is now a $300-billion economy
Pakistan’s textile exports have been stagnant for the last couple of years, mainly due to electricity shortages and poor security situation in the country. This is exacerbated by slow economic activities in Pakistan’s key export markets, especially in Europe.
Ray of hope
There was a significant year-on-year growth in February and March 2017 in the LSM industry. The growth in February and March was 9.16% and 10.46% respectively, which is the highest monthly increase in both 2016 and 2017.
The government expects the LSM growth to continue in coming months due to the Rs180-billion package announced earlier this year to boost the country’s exports.
Published in The Express Tribune, May 26th, 2017.